The Trade Union Congress (TUC) has put forward a proposal for a “production subsidy” to be directed towards the Dangote Refinery and other modular refineries. This initiative is intended to alleviate the increasing cost of Premium Motor Spirit (PMS), commonly referred to as petrol, for Nigerian consumers.
TUC President Festus Osifo articulated this suggestion on Channels Television, emphasizing the need for alternative measures since the Federal Government has ruled out the reintroduction of traditional petrol subsidies. Osifo noted that Nigeria is currently generating significant excess revenue from oil, exceeding budgetary projections by at least $35 per barrel.
“So, what we proposed, knowing and understanding that they wouldn’t want to bring consumption subsidy, we were advocating for a production subsidy,” Osifo stated. He elaborated that a portion of the excess oil revenue could be used to subsidize the crude supplied to local refineries, enabling them to produce cheaper PMS.
Petrol prices have seen a sharp increase recently, rising from about ₦800 to approximately ₦1,300 per litre, depending on the location. This surge follows the outbreak of the US/Israel-Iran War.
Despite considerable pressure to reinstate fuel subsidies, which were removed upon Bola Tinubu's assumption of office in May 2023, the Federal Government has remained firm in its decision. Nigeria’s Coordinating Minister of the Economy and Minister of Finance, Taiwo Oyedele, speaking in Paris, confirmed that the government will not reintroduce subsidies or impose price controls, adhering to its market-driven economic reform agenda.
“We will not bring back fuel subsidy because it creates distortions for the economy, and we won’t introduce price control because we believe in the market… the situation in Iran presents new opportunities for us as the world looks to diversify sources of energy and invest in new markets,” Oyedele said.
However, Osifo urged the government to adopt creative solutions to support citizens amidst escalating living costs, encouraging them to “think out of the box and quickly do things to assist its citizens.”
In related energy sector news, Nigeria’s grid-connected power plants operated at a mere 31 per cent of their installed capacity in April 2026. The Nigerian Electricity Regulatory Commission (NERC) reported that the average available generation stood at 4,286 megawatts (MW) out of a total installed capacity of 13,625MW.
NERC’s operational performance factsheet indicated a slight 5 per cent improvement in available generation compared to March. However, persistent voltage and frequency instability continued to affect grid reliability, with both parameters exceeding prescribed operational limits throughout the month.
The report detailed that the 28 grid-connected plants generated an average of 4,048 megawatt-hours per hour (MWh/h), representing a load factor of 94 per cent. This suggests that while the dispatch efficiency of available plants was high, the overall availability remained critically low.
Grid voltage levels breached the prescribed range of 313.50kV to 346.50kV, with average lower and upper voltages recorded at 302.60kV and 353.40kV, respectively. Similarly, system frequency exceeded allowable thresholds, with average lower and upper frequencies at 49.20 Hz and 50.76 Hz, outside the permissible 49.75Hz to 50.25Hz range.
The top 10 energy-producing plants contributed 81 per cent of the total electricity generated in April, with hydropower and major gas-fired plants like Egbin, Kainji, and Jebba leading the output. Egbin provided 557MW of its 1,320MW installed capacity, achieving a 42 per cent plant availability factor.
Conversely, several plants showed significant underperformance. Olorunsogo 2, with 750MW installed capacity, had only 33MW available, a mere four per cent plant availability factor. Alaoji 1, Ibom Power 1, and Rivers 1 recorded zero plant availability, indicating complete non-performance during the month.
These figures underscore the persistent structural challenges in Nigeria’s electricity sector, where installed generation capacity far exceeds available and dispatchable power due to issues like low plant availability, gas supply constraints, and transmission bottlenecks.
